Wednesday, March 04, 2009

CECA = ECFA? Nope

Taiwan News, which has been rocking the Blue world with one excellent editorial after another (don't miss this one on Ma and 228), speaks on the transformation of CECA into ECFA:

The groundswell of doubts and even opposition to a proposed "cross-strait comprehensive economic cooperation agreement" between Taiwan and the People's Republic of China compelled President Ma Ying-jeou to shift gears from advocating a CECA as "a fixed state policy" to an intermediary "Economic Cooperation Framework Agreement" (ECFA) Friday.

Ma's revision is not merely semantic, as there is a considerable difference between a "CECA" or a free trade agreement which are governed by Article 24 of the General Agreement on Tariffs and Trade which undergirds the World Trade Organization, in which both the PRC and Taiwan (as the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu) are members.

This sudden switch from the position that a cross-strait CECA was a "fixed national policy" in the face of public criticism from ruling Chinese Nationalist Party (Kuomintang) lawmakers as well as the opposition Democratic Progressive Party and Taiwan-centered civic groups, confirmed widespread impressions that Ma (and his right-wing KMT Cabinet team) lack mature strategic thinking and only focus on technical or tactical matters and on the form of the bottle instead of its contents.

The confusion caused by the KMT government's reversal of the proper order of the process and the evident inability of KMT government officials to get on the same page has likewise demonstrated the crude and immature results of the KMT Cabinet's habit of "manufacturing carts behind closed doors."

Ironically, we wonder whether PRC State Chairman and ruling Chinese Communist Party General Secretary Hu Jintao, who called for the two sides to negotiate a "CECA" under the framework of Beijing's "one China principle," is himself disoriented by Ma's semantic policy acrobatics between CECA and ECFA.

Time to come clean

While the KMT government's internal confusion is undoubtedly worrisome and embarrassing, the gravest issue in this flap is the evident inability or, more likely, abject refusal of the Ma government to frankly discuss and thoroughly discuss the nature of an ECFA and CECA and the attendant costs and risks as well as purported benefits with Taiwan's opposition parties, diverse economic, civic and social "stakeholders" and all citizens.

The pro-Green Taiwan Thinktank hosted a forum on ECFA that pointed to all the problems of the proposed CECA Lite:

Although the ECFA with China could benefit some industries, the government has not told the public the impact it would have on other industries and on sovereignty, he told the forum yesterday hosted by the Taiwan Shadow Government think tank founded by former Democratic Progressive Party (DPP) chairman Frank Hsieh (謝長廷).

Former minister of finance and former Taiwan permanent representative to the WTO Yen Ching-chang (顏慶章) said an ECFA would be little more than a “letter of intent” with a timetable. It would be a framework for achieving a substantial free-trade agreement (FTA), but would lack any content, he said.

Yen said an ECFA would be a totally “void” pact with no immediate impact on Taiwan’s economy, contrary to what Ma has portrayed, as mutually beneficial measures such as the opening of Taiwan’s market would be necessary to achieve a substantial FTA.

Former vice premier Wu Rong-yi (吳榮義) told the forum it was strange that while China blocks Taiwan from signing any FTAs or similar pacts with other countries, it wants to ink one with Taiwan.

The premier also spoke to the legislature about ECFA the other day, but refused to provide any details. Everyone is promising that Taiwan's sovereignty will not be infringed. Yeah, right.

Note that no matter what the name or particulars of the proposal, it will be ages before anything happens. But the government and pro-Blue media have repeatedly said that the agreement must be inked as soon as possible. “We are not only signing economic agreements with China. It’s part of our global strategy. It’s very important. If we do not start doing it today, we will regret it tomorrow,” Ma has said. Yet there is no important benefit that Taiwan could get from China it does not already have, or could potentially have. For example, a framework for Chinese investment was legalized here under the DPP. The Ma government has to have something, anything, to show the deeply angry and anxious public that it is actually doing something for the economy of the island.

While Ma keeps saying that ECFA is merely a framework for agreement (not a comprehensive agreement itself) the Administration has shied away from offering anything concrete to the public, even for the "framework." Taiwan News points out that a CECA FTA is governed by the rules established under the GATT and WTO, which both Taiwan and China belong to, whereas a vague "framework" for economic cooperation might not be.

It's probably not a coincidence either that officials in China have revived the periodic call for a Cross-Strait common market.

Yiin said that the pact was provisionally called an ECFA. When asked whether it sounded like an auspicious name as pronounced in Hoklo (also known as Taiwanese) — the acronym ECFA sounds like “the country will get richer” (A擱發) — Yiin said he agreed.

Pronunciation of the acronym CECA sounds like “washing feet” in Hoklo.

He said the official name of the pact in Chinese and English would not be finalized until after negotiations with China.

The sound of words is an important component of local attitudes toward luck and fate. If you travel around Taiwan and see tables of offerings to local deities, frequently the items comprising the offerings are there because their name has a sound that conveys a positive meaning related to the concrete need at hand -- for example, when asking for wealth, things that sound like "rich" or "get rich" might be offered. This principle is common in many areas of local life. When we visited the Lin Family Complex the other day, there was a doorway shaped like a vase (hwapin), because the second syllable, pin, recalls the sound of peace (ping).

Furthermore, there are no cases thus far where members signing an FTA in accordance with Article XXIV of GATT and Article V of GATS refuse to recognize each other’s sovereignty. Not surprisingly, China’s stern refusal to recognize Taiwan’s sovereignty is widely known. Therefore, the ability of the two sides to enter into a WTO-plus relationship, culminating the signing of CECA will be a political quagmire.

In response to Anon's CNN link:From the article Wen's address came just over a week after U.S. Secretary of State Hillary Clinton met with him in Beijing to discuss strategic issues, including the economy, regional security and the environment.

Interesting timing. About the amount of time to react to something surprising and formulate a response. So was it Hillary's behind closed doors tough talk that forced China to make offers of peace? Was it her persuasive charm and impeccable logic making the Chinese see the value of making love and not war? Or did she sell out Taiwan and this is China's first step of a trap to get Taiwan to stake peace on a "one-China" policy, a peace that Beijing will feel no obligation to honor and no foreign country will feel an obligation because, by the one-China policy, it is strictly an internal matter?

Readin, the comments were made at the opening day of the NPC. Wen is making general comments about several matters as one would expect at such an event. Some comments about Taiwan usually make it into the speech, so the timing is almost certainly unrelated to Clinton's visit. He also mentioned the economy, the environment, Hong Kong and Macau and other topics.

Note that this was not front-page news in the SCMP. The placement was well behind stories discussing other elements of Wen's speech. This gives you an idea of the actual importance in the eyes of the local media.

I read the BBC's version. Utter rubbish. It focuses on China's olive branch without mentioning the fact that this was not out of the blue but in character for such an event.

Wen's tone was supposedly more conciliatory. But he still said that peace and military talks would have to be held under the One China principle, and he did not mention separate interpretations. Therefore, he has offered nothing new.

My thought on the more conciliatory announcements is that they are precisely intended to make people think China is more conciliatory. It is a way to make Taiwanese and other foreigners think that China wants a peace deal, thereby putting pressure on Taiwan to sign something and removing pressure from the Chinese.

The missiles are still there. The military threats still stand. The One China principle is the same.

On Tim Johnson's China Rises (McClatchy) blog, he posted a story about the three Hong Kong citizens who were denied entry into Macau:

...Chan told reporters he suspects his opposition in 2002 to a rather Draconian security law in Hong Kong was what led to the action. Hong Kong rejected the proposal but Macau passed a nearly identical proposal last week, and it went into effect Tuesday. The law prohibits treason, secession, sedition, the theft of state secrets and subversion against the Beijing government.

Because of the secrecy, I do wonder if the KMT has the audacity to try and slip something like this law into the ECFA? You know they want to. I think its just a matter of time before something like this gets passed.

If so, the most popular song in KTV's next summer will be Sayonara Free Taiwan. (and VFT).

Unless they release the details in this ECFA pack, I don't see any reason to trust them. I don't think throwing out numbers (ie. unemployment rates, GDP rates...etc) is convincing as they can well be made up numbers. Unfortunately, the cab drivers and the majority in Taiwan might believe those crap...

Other than that, I don't see there will be much benefit other than the ones Taiwan is having from trading with china. It is ironic that China won't let Taiwan sign FTA with other countries but themselves.

I agree more details on ECFA are desirable. However, if too much emphasis is put on the negotiating political platform with the glass-half-full attitude then I think Taiwan might as well just practice Isolationism because nothing will get accomplished, and may I remind you, no nation will establish free trade with Taiwan. The formulation of ECFA is the island's pro-business government's delayed response to the surge of ETA all over East and Southeast Asia since 2003. How Taiwan is going to stay competitive when Korea and APEX nations all have double digit trade growth as results of FTA during 2004-2006, when Taiwan stays in <5% in the same period? Korea and APEX nations are Taiwan's top trade competitors, while they are building relationship with US, EU and with each other, only China was willing to negotiate with Taiwan. Sad but truth.

As a complete outsider but a supporter of Taiwan independence. I suggest that one must consider the superiority of the Taiwanese Economic mindset and ability to excel in economic endeavors over the "In the box" mindset of mainland culture. I suggest this agreement could help Taiwan considerably with Taiwan taking full advantage of the benefits. Perhaps my faith in the Taiwanese spirit is un-realistically high. This is simply my observations from extensive time spent in both counties.

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